Director of Operations of North Bergen Housing Authority Pleads Guilty to Extortion

U.S. Attorney’s Office
December 20, 2012

District of New Jersey(973) 645-2888

NEWARK—The director of operations for the Housing Authority of the Township of North Bergen, New Jersey today admitted extorting employees of a maintenance company contracted by the Authority, U.S. Attorney Paul J. Fishman announced.

John T. Kennell, 49, of North Bergen, who was arrested in August 2012, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with extortion under color of official right and by fear of economic harm.

According to documents filed in the case and statements made in court:

While the director of operations for the NBHA, Kennell used his official position to extort cash payments from employees of a company (Company One) that provided repair and grounds maintenance services. Kennell, who supervised the employees of Company One working for the Authority, accepted cash payments in amounts ranging from $100 to $400 from employees for, among other things, securing additional paid vacation days for these employees. Kennell assisted in securing these additional paid vacation days by falsely reporting to Company One that the employees were working at the NBHA, when they were, in fact, traveling outside of the United States. Between February 2008 and June 2011, Company One compensated employees for approximately 80 days of unauthorized vacation, totaling $12,498, because of Kennell’s actions.

Kennell accepted $2,000 to $2,500 in payments for his official assistance in this fraud. He also accepted cash payments of $50 to $100 from an undocumented alien employee of Company One for permitting that employee to twice change the alias that employee was using to continue working. Using his position of authority, as well as the threat of termination of employment, Kennell also regularly extorted the employees of Company One—sometimes as frequently as twice a month—for cash payments in amounts ranging from $10 to $20 per employee.

The extortion count carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 25, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of special agent in Charge Michael B. Ward in Newark; special agents of U.S. Department of Housing and Urban Development Office of Inspector General, under the direction of Special Agent in Charge Cary A. Rubenstein; criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Lee M. Cortes, Jr. of the U.S. Attorney’s Office Special Prosecutions Division in Newark.